Gold Investors Seek Alpine Haven in Swiss Army Bunkers
The week after Cyprus said in March it would impose a levy on bank deposits of more than 100,000 euros ($132,000) amid Europe’s debt crisis, Rene Buchwalder’s business boomed.
“This bar is one of the best sellers,” said the former UBS AG (UBSN) banker, standing in the vault of his Swiss gold and silver trading company Pro Aurum as he reached into a stone-grey safe holding neatly stacked coins and selected a 100 gram tablet. “You can break it into individual pieces and use it as money in case the European Union goes under.”
As the euro-area went through a record-long recession, and only edged back to growth last quarter, demand for storing gold bars and coins in Swiss vaults has been rising. Even as the price of the metal has declined more than 20 percent this year, some investors see gold as less risky than other assets such as bonds, where debtors may not be able to pay, or equity in a company that may go out of business.
“High-net-worth individuals are dependent on the health of the financial system,” said Ole Hansen, head of commodity strategy as Saxo Bank A/S in Copenhagen. “If you take some of your investments out and put it in the vault, then you can reduce your exposure.”